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A. L. JOHNSTON, in.

MEANS FOR FACILITATING. m5 KEEPING 0F THRIET, nccoums BY BANKS.

APPUCATION HLE D. JULY 1?. I919.

Patented Sept. 9, 1919.

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MEANS FOR FACILITATING THE KEEPING OF THRIFT ACCOUNTS BY BANKS.

APPLICATION FILED JULY n. 1910.

'1 ,3 1 5 ,77 3 Patented Sept. 9, 1919.

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UNITED STATES PATENT OFFICE.

ANDREW LANGSTAFF JOHNSTON, 3'1, 01' THE UNITED STATES NAVY.

MEANS FOR FACILITATING THE KEEPING 0F THRIFT ACCOUNTS BY BANKS.

Specification of Letters Patent.

Patented Sept. 9, 1919.

Application filed July 17, 1919. Serial 10. 311,441.

To all whom it may concern:

Be it known that I, ANDREW LANGSTAFF JouNsToN, Jr., of the United States Navy, a resident of Richmond, Henrico county, Virginia, and a citizen of the United States, stationed at Newport News, Va., have invented certain new and useful Improvements in Means for Facilitating the Keeping of Thrift Accounts by Banks; and I do hereby declare the following to be a full, clear, and exact description of the invention, such as will enable others skilled in the art to which it-appertains to make and use the same.

The object of this invention is to encourage the making and maintaining of savings accounts, and to facilitate the keeping of the same, both for the 'bank or other custodian, of the funds deposited, as well as for the depositor himself or herself.

Many such accounts are terminated to satisfy a temporary whim, which is later regretted, and if some means can be devised to make a depositor think before acting, man savings accounts will be saved, both to the depositor and to the bank.

The war loans have educated the general public to understand the interest-earning capacity of money, by seeing in the form of interest-bearing coupons what they will receive from time to time for the use of their money. This national benefit can be con tinued if a convenient and elastic system embracing this general principle is established by the banks or other depositoi'ies throughout the country.

A man will not become a bolsheviki if he has money in bank or property to lose; nor will our foreign element send money out of the country as soon as earned if shown how to make it grow here.

Such a system should allow (1) The deposit of any amount at any time. If a fixed amount at a fixed time is required, the depositor himself becomes a savings bank during the period between deposits. This is to be avoided.

(2)The privilege of terminating an account at any time. An inducement, however, should be offered for the continuation of the account for a given period.

(3) Entry in the pass book of the interest to be earned on each deposit for the term of years the account is to run. Seeing is be lieving, and to know beforehand what your money will c m for yo in a certain p i d will do more to encourage thrift than anything else.

This requires a quick and simple means of calculating interest.

(4) The transfer of an account from one bank, or city, to another without the depositor losing the accumulated interest earning capacity of his account.

The above requirements have been considercd and incorporated and their fulfilment is provided for in the invention hereinafter described.

My means for accomplishing this is first to offer an inducement in the form of a slightly increased rate of interest (compound), providing the account is kept in force for a period of years agreed upon when the account is started.

secondarily, by bringing to the depositors attention the interest each deposit will earn during this period by placing in the pass book along with the amount deposited the 'resulting interest, and carrying forward throughout the book the total amount of de posit, also interest, so that the depositor can see at any time the total interest-earning capacity of each deposit. This form of saving can run for any term of yearsone, five, ten, twenty, etc. An inducement in the rate of interest paid can be offered for the longer terms.

The rate of interest paid willbesubject to the banks judgment, and would, of course, 7 vary in different sections of the country. A slightly increased rate of interest over the existing time rate should be oil'ered as an inducement for a depositor to keep his money in bank without checking on it for a period of years. This the bank can well afford to do. If an account is terminated before the stipulated period the usual time rate of interest can be paid, so that no loss will be incurred by the depositor by taking out this form of savings account.

Many may hesitate to take out an endowment savings account due to not knowing that they will remain in a certain locality for the period of the accountsa v 5 years. By terminating the account the depositor would lose the endowment feature of the system: and to forward money from one city to another would he inconvenient.

Likewise to accommodate accounts to run for various periods of vears-10. 15. 20. etc. would require the bank to carry in stock a considerable supply of pass etc,

The temptation to spend money when it is seen that a considerable amount has been saved is also to be avoided.

To overcome these possible objections, it is proposed to issue endowment savings bonds -(or certificates if there is an obJection to the word -bond) which can be purchased with the endowment savings account funds at any time a suflicient amount has been deposited to pa for an endowment savings bond of the desired term. As the bond yields the same rate of interest as the endowment savin s account the depositor does not lose b the transfer.

In order to aeilitate the practical operation of such a system I have devised the apparatus that will now be described, reference bein hadv to the accompanying drawings, in w ich like parts are indicated by s1m1lar reference symbols throughout the several views, and in which Figure 1 represents diagrammatically two typical pages of a bank book, or so-called pass bookembodying certain'details of my invention.

Fig. 2 represents diagrammatically a typ1- cal interest table contained in a pass book of the type described. I

Fig. 3 represents a typlcal endowment savings bond adapted for use in connection with my invention.

Fig. 4 represents a typical page of a pass book of the type shown in Fig. 1,.show1ng the depositors balance applied to the purchase of an endowment bond; and

Fig. 5 represents the form of receipt from the depositor to serve as a voucher to the bank as to the sale of said bond.

In order to facilitate the keeping of such accounts, I have devised a simple and elastlc pass book composed of any desired number of pages A, one of which is shown in Fig. 4:, and two of which are shown in Fig. 1. separated by the dotted line aa which represents the fold between two adjacent pages of the book; with one or more interest tables B printed or bound in a convenient place in said boo-k, preferably printed on the inside of the cover of the book, so that it may be conveniently consulted by the depositor and is not likely to become torn or defaced from long or frequent use. Such an interest table may be prepared for any given rate of interest, simple or compound.

If prefered, the books may be printed separately, and the interest table printed on slips, one of which may be pasted in each pass book. Such 'an interest table I have shown in Fig. 2, which will be hereinafter more fully described. Suitable instructions (not shown) as to the use of the book and the interest table may also be printed or pasted in the pass book.

Referring now to Figs. 1 and 4; at the top of each page of the pass book, I pro ide a space A separated by the horizontal line a and the vertical lines a into spaces forming two horizontal columns or tiers of spaces, at the left of the upper tier of spaces the legend No. of months is printed, meaning the number of months the deposit has to run, the rest of this column should be filled in by the bank, preferably in ink, to suit the requirementsof the special case.

In the lower tier of smaller spaces in the space A, at the left the caption Month is printed followed by a blank space for the calendar year, as 1919, which should also be filled in by the bank, and to the right of this in sequence the names of the months are printed.

Below the horizontal space A, and separated therefrom, as by the ruled lines a the body of the page is divided into three vertical spaces A A and A separated from each other as by the vertical ruled lines a, and these spaces are separated into smaller horizontal spaces by the ruled lines a At the head of the space A the caption Date is printed, beneath which are the ab breviations Brt. fwd. (meaning brought forward, and referring to the column to the right), and below are left spaces to be filled in with the month and day that each deposit is made.

The space A bears the caption Deposit, and the amount brought forward is to be written into the first line, following which will be the amount of each deposit entered singly, the total amount of which should ordinarily be footed up at the bottom of the page and carried forward to the next page.

The column A bears the caption Interest at maturity, and in the first line the total amount of the interest in the column on the preceding page is ordinarily carried forward, while in the lines below the accumulated interest at maturity on each deposit is entered singly by the bank official when the deposit is made, so that the depositor can see at a glance how much each particular deposit will have increased at maturity, and so that the depositor may also see at a glance the sum total of his deposits and the sum total of the accrued interest at maturity. Thus referring to the second page A of Fig. 1, the depositor, after making his deposit on February 25, 1920, can see that his total deposits in cash amount to $600.32, and that the interest earned on this amount will be $101.26, at maturity, or in March, 1924.

When a deposit is made and entered with accruing interest in the depositors pass book, the interest so'calculated should be entered by the teller on the ordinary deposit slip, so that it can be entered into the recordsof the depositors account, thereby saving the present burden of calculating interest periodically.

The interest table contained in the book, and illustrated in Fig. 2, shows the'accruing rate of interest for each month during the period the account is to run; the table being computed to show the interest accruing on $100, compounded annually at 35%.

This table is intended primarily to enable the depositor to check up the figures made by the bank in computing the accruing interest on each deposit, as it is made, so that the depositor may know that no mistakes are made in such computations. Such tables may also be used by the bank official, if desired; but instead of having to refer to the table in the back of the book to find the interest corresponding to any month and multiplying it out by hand in order to insert the amount of interest earned on each deposit, a slide rule or calculating chart graduated to the corresponding interest rates, but marked numerically, 60, 59, 58, etc., to 1, corresponding to the number of months in the period, can be supplied the receiving teller so that he can make the interest calculations quickly.

To avoid the difliculty of calculating the interest from the exact day of deposit, the rate of interest could be calculated from the 15th day of each month to the end of the period. The slight error'resulting would be balanced up in the long run, for if a deposit was made prior to the 15th of the month, the bank would gain, and if after the 15th the depositor would gain a small amount of interest, though with the average savings deposit it would be too small to consider.

If a five-year account is started say in March, 1919, the first deposit will bear interest for months (59!; months actual) and 60 will be placed upon the first deposit page Fig. 1 beside the month of March and 59, 58, etc., to 49 beside the other months of the first year and so on for the remaining years as the book is used.

In the month column of the interest table (Fig. 2) in the book would be added (preferablyby pasting in) a slip B, containing twelve consecutive months, beginning with the month the deposit is started-March in this case.

The pass book is elastic for if the first two deposit pages are filled in less than a year it can be continued onthe next page, with the numbering of the months continued as on the first page and so on through the entirr period of the account.

Tans the space A on the two pages illustrated in Fig. 1 is each marked to cover a period of twelve calendar months, but an account may be started in any month of the twelve. say March, and carried forward month by month irrespective of the number of months indicated in the space A. For instance, in Fig. 1 the account is sho n as started March 20, 1919, the first page of the pass book is filled up by October 25 of the same year and the entries run right along on the next page ending in February, 1920, or the 49th month before maturity. Thus no change in the printin of the space A on each page is requiret, and it is a simple matter for the bank official to jot down in ink the number of the months, before maturity, for the year, and to calculate the interest therefrom.

If the depositor is about to move or to go away for a lengthy stay, or has other rea sons for closing out an endowment savings account, I have provided an arrangement whereby he can secure an endowment bond payable at any date agreed upon with part or all of his savings, and can either cash in any excess if small, or add a small cash payment, if necessary, to make up the cost of the bond.

Figs. 4 and 5 which represent, respectively, a sample sheet from a pass book of an endowment savings account, and the banks receipt for any part of same invested in an endowment bond, illustrate the simplicity of the transfer. As will be noted $61.00 has been deposited up to May 7, 1919, earning at maturity (March, 1924) $9.46 in interest. On May 7, 1919 the depositor desires to transfer to a $100.00 endowment savings bond to run say for 18 years which costs $53.80 (see Fig. 3) leaving a balance of $7.20. As $53.80 is being drawn out, interest on same for 46 months or $7.60 (May being the 46th month before maturity) has to be deducted from the interest corresponding to $61.00 which is shown to be $9.46, thus leaving an interest balance of $1.86.

In recording the transaction in the pass book as the depositors receipt, the bank obtains a receipt by making a carbon copy, Fig. 5, which is signed by the depositor and pasted or otherwise attached to the banks record of the depositors account. The bank will, of course, be glad to hold the bonds for the depositors.

The depositor can either cash in for the small amount left to his credit, or preferably continue the use of the pass book with the balance of $7.20 in principal and $1.86 in interest and at any time a sufficient amount has been deposited another endowment savings bond can be purchased to mature at the same time, 1937, or any time desired. Thus a short term endowment savings account can conveniently and flexibly be converted at any time into a longer term one without losing the accumulated interest earning power of the money deposited. Or if a depositor is leaving the city he can convert practically all of his savings into bonds and thereby not lose the interest earning feature of the system.

With regard to the endowment savings compounding to be selective; likewise debond, or certificate, illustrated in Fig. 3, the

The bond can be either transferable or non-transferable.

The rate of interest paid and period of nomination and term of bond.

In addition to encouraging thrift, the advantages offered by this system are apparent,

bothto the bank and to the depos'itor, though it may be well to enumerate a few. 7

Economy feature.

In localities where bank'spay 4% interest on savings accounts, this system can be of especial value to the bank, by allowing 4% on endowment accounts an 23% on accounts permittin checking. By this means the bank will re uce the nuisance of .checking on savings accounts and if the depositor desires this privilege he pays for it and saves for the bank-{7b, though the bank will retain the advertising feature ofpayin 4%" on savin s accounts.

ln localitiesw ere the banks are pledged to a uniform rate of interest, the system will still be attractive to depositors who really want to save money though the inducement of an increased rate of interest is not offered, also it eliminates for the bank the checking nuisance.

Asswrance feature.

This system practically enables a bank to do an endowment assurance business. A depositor can instruct a bank to transfer from his checking account .a certain sum each month to his endowment savings account without any worry to h1m. Such an account for say a 20 year period starting at the birth of a child for 1ts future education would undoubtedly prove popular. Ten dollars per month at 35 compounded yearly would amount to about $4000.00 at the end of 20 years.

Bowowing feature.

The borrowing feature of this form of account is also attractive, for if at any time a depositor needs money for a short while he can borrow from the bank to the amount of his savings, without interrupting the interest-bearing capacity of his savings account, the pass book being presented as collateral.

While I have shown the invention as applied to a system paying 3% interest, compounded annually, it Wlll be obvious that it is applicable as well to other rates of interest, whether computed as simple or compound interest, and that variations in the form of the bonds, and the general arrangement of the various parts used in carrying out the system, as above explained, may be used Without departing from the spirit of my invention.

What I claim and desire to secure by Letters Patent of theUnited States is 1. Means for facilitating the keeping of thrift accounts by banks, comprising a pass book having its leaves ruled in. parallel columns with indicia to show. respectively the date of each single deposit, the

amount of said deposit, and the interest accruing on said deposit at thedate of maturity of the account, with a ruled space transverse of the page with marksthereon to indicate the year, the months in order of sequence, and a delineated space opposite each month to be filled in to indicate the number of months that must pass before the said account reaches maturity, substantially as and for the'purposes described.

2. Means for facilitating the keepingof thrift accounts by banks, comprising a pass book havin its leaves ruled in parallel columns wit indicia to show respectively the date of each single deposit, the amount of said deposit, and the interest a'cc on said deposit at. the'date of maturity o the account, with a ruled space transverse of the page with marks thereon to indicate the year, the month in order of sequence, and a delineated space opposite each month to be filled in to indicate the number of months a that must pass before the said account reaches maturity, with "an interest table contained in said book, said table showing the rate of accruin' interest, simple or compound,as agree uponwhen said account is started, arranged for an predetermined number of months as agree upon, with said months entered in said table beginnin with the month the account is started, su ntially as and for the purposes described.

3. Means for facilitatingthe-keeping of thrift accounts by banks, comprising a pass book havin its leaves ruled in parallel columns wit indicia to show respectively the date of each single deposit, the amount of said deposit, and the interest accruing on said deposit at the date of maturity of the account, with a ruled space transverse of the page with marks thereon to indicate the year, the months in order of sequence, and a delineated space opposite each i month to be filled in to lndicate the number of months that must pass before the said account reaches maturit with an interest table in.

cluded in said 00k, and showing the rate of accruin interest on any fixed sum at the rate agree upon, and a separate slip in-' book having its leaves ruled in parallel columns with indicia to show respectively the date of each single deposit, the amount of said deposit, and the interest accruing on said deposit at the date of maturity of the account, with a ruled space transverse of the page with marks thereon to indicate the year, the months in order of sequence, and a' delineated space opposite each month to be filled in to indicate the number of months that must pass before the said account reaches maturity, with an interest table contained'in said book, said table showing the rate of accruing interest, as agreed upon when said account is started, arranged for any predetermined number of months as agreed upon, with a separate sli indicating said months pasted in said tab c, said slip beginning with the months the account is started and ending the twelfth monththerefrom substantially as and for the purposes described.

ANDREW LANGSTAFF JOHNSTON, JR. 

